Before us is a petition for review on certiorari assailing the decision of the Court of Appeals dated August 31, 1992.

The factual background of the instant petition is as follows:chanrobles law library : red

In 1984, Philippine Bank of Communications (PBCom) filed two (2) collection suits against, among others, Joseph L.G. Chua, husband of herein private respondent, who acted as one of the sureties for the financial obligations of Fortune Motors (Phils.), Inc. and the Forte Merchant Finance, Inc., with the petitioner. After the filing of the complaint, the co-defendants of Joseph L.G. Chua had no more properties left to answer for their obligations to the bank. Since Joseph L.G. Chua bound himself solidarily with the two principal debtors, the bank chose to run after Joseph L.G. Chua who was found to own a property situated in Dasmariñas, Makati. Said property was, however, discovered to have been earlier transferred to Jaleco Development Corporation by virtue of a Deed of Exchange dated October 24, 1983 executed by Joseph L.G. Chua with the conformity of private Respondent. The bank considered such transfer as in fraud of creditors and thereby sought its annulment before the Regional Trial Court of Makati, docketed as Civil Case No. 7889. A notice of Lis Pendens was thereafter registered on July 17, 1984.

Meanwhile, the collection suits filed by petitioners (Civil Case No. 84-25159 and Civil Case No. 84-25260) which reached this Court and the Court of Appeals, respectively, became final in favor of PBCom.

Said decisions could not be executed since petitioner was still awaiting the finality of the decision in Civil Case No. 7889 which was pending with this Court (docketed as G.R. No. 92067). Finally, on March 22, 1991, this Court declared the Deed of Exchange null and void after finding that the transfer of the property to Jaleco Development Corporation was indeed in fraud of PBCom as creditor.

When said decision became final, the subject property was immediately levied, and the auction sale was set on July 30, 1991.

On July 24, 1991, private respondent Gaw Le Ja Chua, wife of Joseph L.G. Chua, filed a Third Party Claim with the Sheriffs of Branches 8 and 9 of RTC, Manila. At the same time, she initiated two separate reinvindicatory actions on the subject property in the lower court.

Petitioner, on the other hand, filed an Urgent Motion to Direct the Sheriff to Enforce the Writ of Execution/Auction Sale.

On August 15, 1991, the RTC denied petitioner’s motion. The Motion for Reconsideration with a motion to quash the third party claim was, likewise, denied in an Order dated October 21, 1991.

Dissatisfied, the petitioner came to this Court assailing the RTC’s Orders. The matter was, however, referred to the Court of Appeals for proper disposition.

On August 31, 1992, the respondent court dismissed the petition in this wise:chanrob1es virtual 1aw library

Petitioner’s allegation that private respondent is not the third-party or ‘stranger’ referred to under the aforequoted rule is an issue which will properly be resolved by the Regional Trial Court of Makati where the separate reinvindicatory actions are pending. It will be premature for Us to pass upon such issue while the same is still pending before the lower court.

WHEREFORE, there being no abuse of discretion on the part of the public respondent and there being a plain, speedy and adequate remedy available to petitioner in the ordinary course of law, this petition is dismissed with costs.

SO ORDERED. 1

The motion for reconsideration was likewise denied. Hence, the instant petition with the following assignment of errors:chanrob1es virtual 1aw library

I.

THE COURT OF APPEALS GRAVELY ERRED IN NOT DECLARING THAT BRANCH 8, REGIONAL TRIAL COURT OF MANILA, GRAVELY ABUSED ITS DISCRETION IN NOT QUASHING THE PATENT AND DUBIOUS THIRD-PARTY CLAIM OF THE HEREIN PRIVATE RESPONDENT.

II.

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT PBCOM’S PETITION IS PREMATURE, THUS, CONVENIENTLY BRUSHING ASIDE THE FOLLOWING QUESTIONS OF LAW:chanrob1es virtual 1aw library

II.1 WHETHER OR NOT PRIVATE RESPONDENT CAN BE CONSIDERED A STRANGER WITHIN THE MEANING OF THE LAW THAT WOULD ENTITLE HER TO THE RELIEFS PROVIDED IN SECTION 17, RULE 39 OF THE RULES OF COURT.

II.2 WHETHER OR NOT PRIVATE RESPONDENT IS NOW ESTOPPED FROM FILING A THIRD-PARTY CLAIM AS WELL AS AN INDEPENDENT ACTION INVOLVING THE PROPERTY IN QUESTION. 2

The real issue in this case is whether or not private respondent is considered a stranger within the meaning of Section 17, Rule 39 of the Rules of Court, as to entitle her to the remedy of a third-party claim or reinvidicatory actions over the subject property

We rule in the negative.

A stranger is a third-party who is any person other than the judgment debtor or his agent. In several cases, 3 we have recognized the right of a third-party claimant to file an independent action to vindicate his claim of ownership over the properties seized. This is provided by Section 17, Rule 39 which states:chanrob1es virtual 1aw library

SEC. 17. Proceedings where property claimed by third person. — If property levied on be claimed by any other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. In case of disagreement as to such value, the same shall be determined by the court issuing the writ of execution.

The officer is not liable for damages, for the taking or keeping of the property, to any third-party claimant unless a claim is made by the latter and unless an action for damages is brought by him against the officer within one hundred twenty (120) days from the date of the filing of the bond. But nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property by any proper action.

x x x

While we are aware of the legal maxim that no man shall be affected by proceedings to which he is a stranger, 4 the attendant circumstances, however, in the case at bar constrain us to rule that private respondent cannot be considered a stranger within the purview of the law.

It must be noted that the sheriffs levied on the subject property on the basis of the annulment of the Deed of Exchange executed by Chua in favor of Jaleco Development Inc. as ruled by this Court on March 22, 1991 in Philippine Bank of Communications v. Court of Appeals, Et Al., G.R. No. 92067. In said case, we categorically stated that:chanrob1es virtual 1aw library

. . . [T]he evidence clearly shows that Chua and his immediate family control JALECO. The Deed of Exchange executed by Chua and JALECO had for its subject matter the sale of the only property of Chua at the time when Chua’s financial obligations became due and demandable. The records also show that despite the "sale", respondent Chua continued to stay in the property, subject matter of the Deed of Exchange.

These circumstances tend to show that the Deed of Exchange was not what it purports to be. Instead, they tend to show that the Deed of Exchange was executed with the sole intention to defraud Chua’s creditor — the petitioner. It was not a bona fide transaction between JALECO and Chua. Chua entered a sham or simulated transaction with JALECO for the sole purpose of transferring the title of the property to JALECO without really divesting himself of the title and control of the said property.

Considering that this Court has ruled that the transaction leading to the execution of the Deed of Exchange between Chua and Jaleco was actually a transaction between Chua and himself and not between Chua and Jaleco, such transaction was a sham. As observed by this Court in G.R. No. 92067, the stockholders of Jaleco were mostly members of the immediate family of Joseph L.G. Chua, private respondent’s husband and the couple continued to stay in the property despite its "sale" to Jaleco.

For her part, private respondent gave her marital consent or conformity to the Deed of Exchange and that by that act she became necessarily a party to the instrument. She cannot, therefore, feign ignorance to the simulated transaction where the intention was really to defraud her husband’s creditors.

It should be noted that Civil Case No. 7889 which sought the annulment of the Deed of Exchange was primarily instituted by petitioner to recover the property in question from Jaleco and the couple. It was an offshoot of the two collection cases filed against the husband.

In Vda. de Nabong v. Sadang, 5 which is analogous to the case at bar, we ruled that:chanrob1es virtual 1aw library

. . . If property levied on be claimed by any other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater that the value of the property levied on. In case of disagreement, as to such value, the same shall be determined by the court issuing the writ of execution. . . . From the foregoing provision, it is clear that a third party claim must be filed by a person other than the judgment debtor (defendant) or his agent. In the present case, although Ignacio was not named as defendant there is no doubt that as wife of defendant Sunga she shares a common interest with him in the litigation. Indeed she represented herself to be the agent of Sunga by signing the answer in their behalf. She is therefore as much a judgment debtor and agent of the defendant and not a third party to the litigation.

In a last ditch effort to retain the property, private respondent now contends that it belongs to the conjugal partnership which should not answer for the obligations of the husband. Invoking Luzon Surety v. De Garcia, 6 and Ting v. Villarin, 7 private respondent argues that the property can not be held liable for her husband’s obligations because such obligations never redounded to the benefit of the property regime of the spouses. In said cases, the Court stated that:chanrob1es virtual 1aw library

This particular codal provision in question rightfully emphasizes the responsibility of the husband as administrator. He is supposed to conserve and, if possible, augment the funds of the conjugal partnership, not dissipate them. If out of friendship or misplaced generosity on his part the conjugal partnership would be saddled with financial burden, then the family stands to suffer. No objection need arise if the obligation thus contracted by him could be shown to be for the benefit of the wife and the progeny if any there be. That is but fair and just. Certainly, however, to make a conjugal partnership respond for a liability that should appertain to the husband alone is to defeat and frustrate the avowed objective of the new Civil Code to show the utmost concern for the solidarity and well-being of the family as a unit. The husband, therefore, as is wisely thus made certain, is denied the power to assume unnecessary and unwarranted risks to the financial stability of the conjugal partnership. 8

That the ATTACHMENT ordered by the respondent Judge . . . likewise gives cause for this Court to strike it down for being NULL AND VOID. The ATTACHED PROPERTY of the spouses Ting are CONJUGAL, the same CANNOT BE VALIDLY BROUGHT UNDER the painful process of ATTACHMENT because:chanrob1es virtual 1aw library

x x x

(b) Secondly, the conjugal partnership cannot possibly be benefited (again, here, Consolidated Bank’s allegation that the act of the husband redounded to the benefit of the conjugal partnership is mere ‘book form’) when the husband binds himself as guarantor, because this act does not conserve or augment conjugal funds but instead threatens to dissipate them by unnecessary and unwarranted risks to the partnership’s financial stability. When the husband assumes the obligation of a guarantor, the presumption that he acts, as administrator, for the benefit of the conjugal partnership, is lost." (Emphasis supplied.) 9

The aforecited cases are not applicable. While previously in the Deed of Exchange, private respondent conceded that the property was solely owned by her husband and that it was ceded to Jaleco Development Corp., after this Court ruled against the husband, she changed task by claiming that the property is conjugal and, as an afterthought, she filed a third party claim. Notably, she never intervened in said case where the validity of the Deed of Exchange was being questioned to protect her rights and interests if indeed she truly believed that the property belonged to the conjugal partnership. At the very least, private respondent is now estopped from claiming that property in question belongs to the conjugal partnership. She cannot now take an inconsistent stance after an adverse decision in G.R. No. 92067. In Santiago Syjuco, Inc. v. Castro 10 , we had the occasion to reiterate that:chanrob1es virtual 1aw library

The principles of equitable estoppel, sometimes called estoppel in pais, are made part of our law by Art. 1432 of the Civil Code. Coming under this class is estoppel by silence, which obtains here and as to which it has been held that:chanrobles.com.ph : virtual law library

. . . an estoppel may arise from silence as well as from words.’Estoppel by silence’ arises where a person, who by force of circumstances is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance on which he acts to his prejudice. Silence may support an estoppel whether the failure to speak is intentional or negligent.

‘Inaction or silence may under some circumstances amount to a misrepresentation and concealment of facts, so as to raise an equitable estoppel. When the silence is of such a character and under such circumstances that it would become a fraud on the other party to permit the party who has kept silent to deny what his silence has induced the other to believe and act on, it will operate as an estoppel. This doctrine rests on the principle that if one maintains silence, when in conscience he ought to speak, equity will debar him from speaking when in conscience he ought to remain silent. He who remains silent when he ought to speak cannot be heard to speak when he should be silent.’

Finally, we take special note of the fact that this case has been going on for several years. Because of a dubious third party claim filed by private respondent, petitioner has been deprived of the fruits of the judgment in its favor which has become final and executory since 1991. In Pelayo v. Court of Appeals, 11 we emphasized that:chanrob1es virtual 1aw library

. . . Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict. Courts must therefore guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any attempt to prolong them.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is SET ASIDE. This case is REMANDED to the Regional Trial Court Manila, Branch 8, for execution.